European shares fall on weak data, Greece jitters
Shares fell in Europe on Thursday, sapped by doubts over the Greek bailout plan and gloomy manufacturing data from the region.
Germany’s DAX fell 1.1 percent to 11,739.81 and France’s CAC-40 lost 1 percent to 5,161.20. Britain’s FTSE 100 lost 0.2 percent to 7,015.15. Wall Street likewise looked set for a slow start, with Dow and S&P futures both down 0.4 percent.
An agreement with Greece’s European creditors on additional reforms in exchange for rescue money due for the end of April remains far off ahead of a meeting Friday in the Latvian capital of Riga. The lack of a plan to protect Greece from defaulting and even dropping the euro is clouding prospects for its recovery.
A preliminary survey of factory managers showed Eurozone business activity slowed in April from March’s 11-month high, reflecting weaker rates of expansion for France and Germany despite accelerating growth elsewhere in the region.
“U. S. and European equities have been seeing some choppy trade with a bit of uncertainty around earnings data and Greece. This is unlikely to change in the near term and could be a deterrent for some investors for the time being,” Stan Shamu, a market strategist for IG, said in a commentary.
Asian Stocks Higher
Asian markets mostly rose, with another poor reading of Chinese manufacturing lifting Shanghai on hopes for further stimulus while a weaker yen boosted Japanese exporters.
Tokyo added 0.27 percent, or 53.75 points, to finish at 20,187.65, while Sydney rose 0.13 percent, or 7.3 points, to close at 5,844.8 and Seoul climbed 1.38 percent, or 29.52 points, to 2,173.41.
Hong Kong shares fell 0.38 percent following a recent rally and a report indicating Chinese manufacturing activity contracted in April.
The benchmark Hang Seng Index slipped 106.15 points to 27,827.70. Turnover was HK$191.77 billion (US$24.74 billion). But Shanghai rose 0.36 percent.
HSBC said its preliminary purchasing managers’ index (PMI) of manufacturing activity in China had slipped to a 12-month low in April, the latest data to show the world’s number two economy slowing.
The reading of 49.2 is down from the 49.6 seen in March and well below the 50 break-even point that separates growth from expansion.
Hopes for monetary easing by China have seen Shanghai’s benchmark index double over the past year, while the Hang Seng has surged this month to levels not seen since the end of 2007 — helped by an easing of rules for cross-border trading.
“The PMI figure missed expectations,” Gerry Alfonso, a director at Shenwan Hongyuan Group Co.’s international business department in Shanghai, said.
“These types of macro figures can be interpreted in different ways and this will cause volatility.”
Tencent fell 1.11 percent to HK$160.90, casino operator Sands China slipped 2.45 percent to HK$31.80 and Hutchison eased 1.58 percent to HK$112.30.
But HSBC added 0.50 percent to HK$70.80, Hong Kong Exchange and Clearing jumped 0.82 percent to HK$296.80 while insurance giant AIA was up 2.15 percent at HK$52.15.
‘Close to the bottom’
In mainland China the benchmark Shanghai Composite Index added 0.36 percent, or 16.02 points, to 4,414.51 on turnover of 963.0 billion yuan ( US$157.1 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, rose 1.01 percent, or 22.52 points, to 2,256.98 on turnover of 687.7 billion yuan.
Official data showed that China’s economy growth in the first quarter was 7.0 percent, its slowest pace since the depths of the global financial crisis six years ago.
In Shanghai China Unicom surged by its 10 percent daily limit to 8.79 yuan while Datang Telecom Technology rose 4.05 percent to 28.28 yuan.
Financial stocks retreated in Shanghai after a recent rally. China Construction Bank eased 1.43 percent to 6.90 yuan while Citic Securities slipped 2.59 percent to 36.84 yuan. China Pacific Insurance also edged down 1.90 percent to 36.21 yuan.
Oil prices were lower, with U.S. benchmark West Texas Intermediate for June delivery falling 26 cent to US$55.90 while Brent crude for June eased 31 cents to US$62.42.
Gold fetched US$ 1,189.92 against US$1,199.00 late Wednesday. In other markets: — Wellington skidded 0.62 percent, or 35.71 points, to 5,757.91.
Fletcher Building was down 1.68 percent at NZ$8.17 and Spark sank 1.58 percent to NZ$6.11.
— Manila gained 0.75 percent, or 59.02 points, to 7,892.05.
SM Prime Holdings was up 2.83 percent at 19.64 pesos and Universal Robina closed 0.92 percent higher at 219 pesos but Metrobank fell 1.77 percent to 97.25 pesos.
— Jakarta was flat, edging down 0.91 points to 5,436.21.
Lender Bank Rakyat Indonesia fell 0.95 percent to 13,050 rupiah while palm oil producer Astra Agro Lestari rose 0.11 percent to 23,075 rupiah.
— Kuala Lumpur slipped 0.47 percent, or 8.69 1,846.08.
Public Bank lost 0.20 percent to 19.58 ringgit, Sime Darby dipped 0.22 percent to 9.25 ringgit while Maybank added 0.98 percent 9.25 ringgit.
— Singapore rose 0.19 percent, or 6.51 points, to 3,502.75.
Oversea-Chinese Banking Corporation gained 0.84 percent to SG$10.83 and Singapore Telecom rose 0.46 percent to SG$4.35.
— Bangkok closed down 0.46 percent, or 7.17 points, at 1,552.01.
Supermarket chain Big C lost 3.42 percent to close at 226.00 baht and Siam Commercial Bank also dipped 2.03 percent, ending on 169.00 baht.
— Mumbai fell 0.56 percent, or 155.11 points, to 27,735.02.
Sun Pharmaceutical Industries fell 2.55 percent to 942.45 rupees, while Tata Steel rose five percent to 368.70 rupees.